Seeyond Europe Market Neutral
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Seeyond Europe Market Neutral Quarterly portfolio commentary 31-Mar-2021 FUND PERFORMANCE Over the first quarter of 2021, Seeyond Europe Market Neutral returned +0.61% while the EONIA Capitalization Index returned -0.1%. MARKET ENVIRONMENT After a strong start to the year - and retaining the same momentum as the end of 2020, markets ended down in the latter part of January. In the US, social networks fueled an incredible price jump of some small-caps and heavily shorted stocks, which prompted several hedge funds to cut their positions and - on a larger scale - the whole market to sharply reduce its leverage. While this phenomenon initially targeted a few companies, its technical impact in the market was magnified by the highly convex and correlated nature of assets. In February, in a context of sharp interest rates’ rises both in the United States (+34bps for the 10 years) and in Europe (+ 49bps for the UK 10 years) and resilient markets, sector and factor rotations once again made the headlines - this time in favor of Banking (Eurozone banks up by almost 20%) and Energy stocks. Despite these transitions with extraordinary magnitude and speed, the "risk-on" mood still prevails, in anticipation of the positive fallout coming from the reopening of economies and – above all - from the various tax supports of President Biden's budget program. In addition, the momentum of the manufacturing activity remains solid, as do estimates of overall GDP growth for the year ahead - as the positive impacts of the vaccination programs progressively kick in. The first quarter of 2021 ended sharply higher for all equity markets, still supported by progress in the deployment of vaccination and reopening programs, as well as by a context of implementation of exceptional fiscal stimulus policies. While the rise in rates continued (1.75% for the US 10-year rate, against 1.4% at the end of February and 0.9% at the start of the year), the rise in March was generalized across all sectors, thus marking a significant difference compared to the previous four months, characterized by very high levels of dispersion in favor of value and cyclical themes. OUTLOOK The speed of rising bond yields makes investors nervous. They fear a sharp and lasting rise in inflation and a shift in monetary policies. If inflation is set to increase in the coming months, in line with the recovery in global economic activity and the implementation of global stimulus plans, we believe this increase will be much more gradual and moderate than some investors predict. The "reflation" of economies is a long process that takes place over time and the Fed has been adamant that it will not take the risk of hardening their policy before the signs of deflation linked to the pandemic are definitively ruled out. Although we believe central banks will be more patient than in previous cycles, we are also aware of the contrasts present in the market today. Despite an undeniable improvement in the economic conditions we remain highly aware of the high levels of leverage, valuation and in several cases reduced liquidity. All of these indicate a degree of market fragility that remains extremely high, while an increased confidence in the economic outlook has all but suppressed the perception of it. POSITIONING OF THE FUND The fund currently holds 173 stocks. France (18.3%), followed by Germany (14.3%), then Switzerland (12.5%) are the largest country exposures. From a sector standpoint, Financials (15.9%) is the largest, followed by Industrials (13.4%) then Consumer Staples (12.3%). Top 5 holdings: Deutsche Telekom (2.1%), Nestle (2.0%), Sanofi (1.9%), Wolters Kluwer (1.6%), Air Liquide (1.5%). FOR INVESTMENT PROFESSIONAL USE ONLY Seeyond Europe Market Neutral I/C (EUR) Fund performance and characteristics 31-Mar-2021 Trailing returns – net of fees 1M 3M YTD 1Y 3Y ann. 5Y ann. 10Y ann. Incep. ann. Fund, % 0.86 0.61 0.61 -1.32 -2.13 - - -1.30 Index, % -0.05 -0.12 -0.12 -0.47 -0.42 - - -0.41 Fund characteristics Seek to generate an absolute positive performance and outperform its Investment objective Reference Index over a recommended minimum investment period. Inception date 29-Jun-2017 Reference Index EONIA TER, % 0.60 % Maximum sales charge, % 0.00 % Redemption charge / CDSC 0 % / - Minimum initial investment 50,000 EUR ISIN LU1612456746 Bloomberg ticker SEEMNIA LX Equity NAV / Share 95.22 EUR Management company Natixis IM International Investment manager Seeyond Please read the prospectus and Key Investor Information carefully before investing. If the fund is registered in your jurisdiction, these documents may also be obtained free of charge from the Natixis Investment Management offices (www.im.natixis.com) and the payer agents/representatives mentioned here below. Germany: Caceis Bank Deutschland GmbH, Lilienthalallee 34 - 36, D-80939 München, Germany, UK: Société Générale London Branch, Société Générale Securities Services Custody London, 9th Floor Exchange House 12 Primrose Street, EC2A 2EG London, Belgium: Caceis Belgium SA, Avenue du Port 86 C b320 B-1000 Brussels, France: Caceis Bank France, 1-3, Place Valhubert 75013 Paris, Italy: State Street Bank S.P.A., Via Ferrante Aporti, 10 20125 Milan All Funds Bank S.A, Via Santa Margherita 7, 20121 Milano, Luxembourg: Caceis Bank Luxembourg, 5, allée Scheffer L-2520 Luxembourg, Netherlands: Caceis Netherlands N.V., De Ruyterkade 6-i 1013 AA Amsterdam, Switzerland: RBC Dexia Investor Services Bank S.A., Badenerstrasse 567, CH- 8048 Zurich. PERFORMANCE DATA SHOWN REPRESENTS PAST PERFORMANCE AND IS NOT A GUARANTEE OF, AND NOT INDICATIVE OF, FUTURE RESULTS. More recent performance may be lower or higher. Principal value and returns fluctuate over time (mainly as a result of currency fluctuations) so that shares, when redeemed, will be worth more or less than their original cost. Performance shown is net of all fund expenses, but does not include the effect of sales charges, taxation or paying agent charges, and assumes reinvestment of dividends. If such charges were included, returns would have been lower. Performance for other share classes will be more or less depending on differences in fees and sales charges. For further information on the performance data, including calculation of performance during periods of share class inactivity, please refer to the Fund Factsheet available under Fund Documents section. For more information about potential charges such as charges relating to excessive trading or market-timing practices please refer to the Fund’s prospectus and the KIID. FOR INVESTMENT PROFESSIONAL USE ONLY Seeyond Europe Market Neutral Fund Risks 31-Mar-2021 The Fund invests primarily in global company shares (stocks). Equity investments may experience large price fluctuations. The Fund is subject to additional material risks including, but not limited, to: Impact of management techniques, Liquidity risk, & Sustainability Risk. All investing involves risk, including the risk of loss. The fund is subject to additional material risks, please see the full prospectus for a comprehensive list of risks. Impact of management techniques The risk linked to the management techniques is the risk of increased losses due to the use of financial derivatives instruments and/or securities lending and repurchase transactions. Liquidity risk Liquidity risk represents the price reduction which the UCITS should potentially accept to have to sell certain securities for which there is one insufficient request on the market. Sustainability Risk The Fund is subject to sustainability risks as defined in the Regulation 2019/2088 (article 2(22)) by environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. More information on the framework related to the incorporation of sustainability risks can be found on the website of the Management Company and the Delegated Investment Manager. FOR INVESTMENT PROFESSIONAL USE ONLY Additional notes This material has been provided for information purposes only to investment service providers or other Professional Clients or Qualified Investors and, when required by local regulation, only at their written request. This material must not be used with Retail Investors. In the E.U. (outside of the UK and France): Provided by Natixis Investment Managers S.A. or one of its branch offices listed below. Natixis Investment Managers S.A. is a Luxembourg management company that is authorized by the Commission de Surveillance du Secteur Financier and is incorporated under Luxembourg laws and registered under n. B 115843. Registered office of Natixis Investment Managers S.A.: 2, rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg. Italy: Natixis Investment Managers S.A., Succursale Italiana (Bank of Italy Register of Italian Asset Management Companies no 23458.3). Registered office: Via San Clemente 1, 20122 Milan, Italy. Germany: Natixis Investment Managers S.A., Zweigniederlassung Deutschland (Registration number: HRB 88541). Registered office: Im Trutz Frankfurt 55, Westend Carrée, 7. Floor, Frankfurt am Main 60322, Germany. Netherlands: Natixis Investment Managers, Nederlands (Registration number 50774670). Registered office: Stadsplateau 7, 3521AZ Utrecht, the Netherlands. Sweden: Natixis Investment Managers, Nordics Filial (Registration number 516405-9601 - Swedish Companies Registration Office). Registered office: Kungsgatan 48 5tr, Stockholm 111 35, Sweden. Spain: Natixis Investment Managers, Sucursal en España,